Rinker on Collectibles: Preventing Lackaloot

Sarah Foster’s “Many Americans don’t have emergency savings” reprinted from  www.bankrate.com was the lead story in the February 15, 2019, edition of the “Grand Rapids Free Press.”  Foster notes: “a recent Bankrate survey found that only 40 percent of Americans would cover an unexpected $1,000 expense with their savings….”

I grew up in a generation when “saving for a rainy day” was something one did and never questioned.  I did not always have enough emergency savings to cover six months as the experts advised, but I made certain I was protected for the short-term.  It also was an age when credit cards were in their infancy.  I was in my mid-20s when I acquired my first credit cards.  It will not surprise my readers that a St. Louis Playboy Club credit key, which I still have in my possession, was among the first I acquired.  Every card was paid in full when due.  My father was a strong advocate of “not living beyond your means” and made certain I understood exactly what the concept meant.

The availability of discretionary income is critical to the antiques and collectibles business.  In past columns, I have identified and analyzed how discretionary income has been channeled from the antiques and collectibles sector to new sources.  When reading articles identifying the 21st-century adventure favored by the current generations, antiquing is almost never mentioned.

Foster’s article called attention to the large number of Americans living paycheck to paycheck.  Such a situation removes these individuals from the secondary antiques and collectibles marketplace unless they understand that “cheaper than new” is one of the principal tenets of the trade.

In previous columns, I argued that a true collector always will find a way to finance an antique or collectible without which they cannot live.   Mark Hemrick, Bankrate’s senior economic analyst, notes individuals needing emergency funds, will “likely turn to credit cards or loans to fund necessary expenses.”  In the past, I have financed purchases through borrowing from banks and friends, credit cards, layaway, and a host of other creative ideas.

I still use a credit card, especially when it buys me time to decide how I want to pay for something.   I keep a modest supply of cash on hand.  Money is a powerful talker when buying antiques and collectibles.  I prefer to pay by personal check or cash.  I use PayPal only when I have no other choice.  Finally, I maintain a “Purchase” savings account for emergencies.

Ten years ago, things were different.  I often spent money faster than it came in.  My rationale was that as an independent business owner, the threat of debt was an incentive to find work.  I will refrain from providing the number of times I came close to declaring bankruptcy except to state it was more than once.  Each time, good fortune and unexpected funds saved the day.

Most collectors are not savers.  They do not think in terms of emergency funds.  Money burns a hole in their pockets and purses.  When they see something they want to buy, they do not want excuses, only ways to complete the transaction.

About three months ago, I wrote “Rinker on Collectibles” Column #1668 entitled “The Lackaloot (lack of loot) Conundrum.”  It appeared in the January 21, 2019 edition of AntiqueWeek and several other publications since.

 On January 30, 2019, I received an email from Mike Union, a “longtime collector/buyer/seller, in that order, and not a dealer.”  Mike, who is retired, informed me that he always carries a 100-dollar bill for emergency purposes (perhaps “purchases” is a better word) when he goes shopping for antiques and collectibles in case there is no ATM nearby.”

            [Author’s Aside #1:  If $100.00 covers the majority of objects Mike buys, he is a most fortunate individual.   Not many collectors can make such a claim, even in today’s antiques and collectibles marketplace.  I am a notoriously cheap buyer, something Mike and I have in common.  In the realm of true confessions, cheap though I am, half my purchases tend to exceed $100.00.]

Mike is splitting hairs.  I am not certain I see a distinction between seller and dealer.   Selling to support a collecting habit is a common practice.  Whether done privately, on eBay, or at flea markets, malls, shops, or shows, selling is dealing.  Seller and dealer are synonymous within the antiques and collectibles community.

            [Author’s Aside #2:  Do not make a mistake and assume I am condemning the practice of a collector selling to maintain or add to his/her collection.   It is an accepted business practice in the antiques and collectibles trade.  Collectors-sellers who argue that they are not dealers because they do not sell on a regular basis only fool themselves.  When collectors sell, they become dealers, even if only for a brief moment.

This creates a conundrum.  Matthew 6, Verse 24: “No man can serve two masters, for either he will hate the one and love the other or he will hold to the one and despise the other” (King James version).  The collector-seller/dealer can never be certain that he/she is placing his/her or the customer’s interests first.  In spite of this ethical/moral dilemma, few collector-sellers/dealers have trouble sleeping at night.  Collectors-sellers always will put their personal interests first.  This is a truism.  It has nothing to do with right or wrong.  It is the way it is.

Mike’s email continues: “At the time (1991), I opened a second checking account to deposit extra proceeds from my occasional selling.  It allowed me to keep separated and manage my discretional income in what I call my “hobby account.”  When I buy an expensive item now, I always try to pay with checks from this account.  I deposit my sale proceeds into it.  I also use e-bay [sic] as a buying-selling format and keep a fairly hefty PayPal account balance in case I find an expensive item that I must have.  I also buy and sell locally….

“All of my collecting purchases over the years have been more than covered using this system—no $ out of pocket.  It has solved the ‘lackaloot’ problem long-term.”

I am uncertain whether to admire or feel sorry for Mike.  He has a highly disciplined approach to collecting.  His discretionary buying fund is financed primarily through an “if a new object comes in an old object must go” philosophy.  I thought about trying this approach, looked in the mirror, and heard a voice coming from the image on the other side of the glass saying, “Forget it.”

The catch is Mike’s words “always try.”   As I interpret this phrase, this means when Mike’s “hobby account” does not have sufficient funds to make a purchase, Mike supplements the account from another source.

Immediate availability and to some degree current market affordability are the real enemies that prevent collectors from setting aside emergency funds for future purchases.  Online selling has eliminated wait time between purchases.  If a collector wants an object, more often than not he will find multiple examples and hundreds of comparable objects available on the internet at any given time.  Immediate availability will only increase in the decades ahead, especially as online sale venues continue to erode the percentage of antiques and collectibles sold at in-seat auctions, flea markets, malls, shops, and shows.

Patience remains a virtue among older collectors, at least for collectors who have collected for over a decade.  After the initial collecting period when a “buy everything I see” attitude prevailed, serious collectors take a slower, more deliberate approach to what they are buying.  Of course, this applies only to collectors with a large amount of display space.   There is a new breed of collector who has a space to fill, fills it as quickly as possible, and then stops collecting that group of objects.

Are you a “Rinker on Collectibles” reader who systematically sets money aside to buy antiques and collectibles?  If so, I would like to learn about your philosophy and approach.  Email your story to me at harrylrinker@aol.com.

Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the twentieth and twenty-first centuries.  Selected letters will be answered in this column.  Harry cannot provide personal answers.  Photos and other material submitted cannot be returned.  Send your questions to: Rinker on Collectibles, 5955 Mill Point Court SE, Kentwood, MI  49512.  You also can e-mail your questions to harrylrinker@aol.com.  Only e-mails containing a full name and mailing address will be considered.

You can listen and participate in WHATCHA GOT?, Harry’s antiques and collectibles radio call-in show, on Sunday mornings between 8:00 AM and 10:00 AM Eastern Time.  If you cannot find it on a station in your area, WHATCHA GOT? streams live on the Internet at www.gcnlive.com.

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